Venture Capital in the UK 2026
In an environment of global political and economic uncertainty, the UK remains a global VC hub. Attracting capital into new UK businesses and supporting them to grow is vital if we are to ensure the benefits of economic growth, including jobs, skills, and wealth creation, are felt across nations and regions of the UK.
Investment
In 2025, VC general partners, alongside corporates and other financial investors, invested £8 billion into UK venture-stage businesses. This flow of capital plays a critical role in translating innovation into commercial success, ensuring that new ideas generate jobs, skills and economic growth across the country.
Venture capital invests across the whole of the UK. In 2025, more than 9,000 businesses were backed by venture funding, supporting innovation throughout the nations and regions. These companies employed 378,000 people – an increase of over 60,000 since 2023 – demonstrating the growing economic contribution of the sector.
UK Private Capital data shows that early-stage companies make up over 80% of all venture-backed companies, consistent with the long-term trend, and illustrating how capital can reach companies at the earliest stages of development.
Later-stage venture capital funding remained broadly stable year-on-year, attracting 44% of total investment. This demonstrates that British businesses are able to attract scale-up capital – although as shown by data presented later in this report, the proportion of VC investment coming from overseas investors increases for larger funding rounds.
Venture capital is, by design, long-term. In 2025, the average holding period for exited UK-based investments was almost 7 years, reflecting the sustained capital and support required to build and scale high-growth businesses. This long-term investment enables companies to expand, improve productivity, develop talent, and create high-quality jobs.
These trends and investment amounts are consistent with 2024, demonstrating the resilience in UK venture capital markets despite wider macroeconomic challenges. Venture capital investors continue to back companies operating in AI, deeptech, defence technology, advanced manufacturing and other strategically important sectors across the UK.
Fundraising
Venture capital fundraising totalled £2 billion in 2025, below the level seen in 2024 – when several large funds closed – and broadly in line with 2023. The number of funds raising capital declined slightly from 48 in 2024 to 42 in 2025.
While UK firms continued to raise capital in a competitive global environment, the overall level of fundraising remains subdued relative to the scale of the UK’s innovation economy.
Despite these constraints, UK venture funds continued to attract capital from a diverse range of investors. Notably, private individuals accounted for the largest share at 18% (up from 7% in 2024), followed by insurance companies (7%), with capital markets investors, corporates and government each contributing around 6%.
However, this distribution of capital also highlights a structural imbalance. The continued underrepresentation of UK pension funds – despite their scale and long-term investment horizons – remains a defining feature of the market which this report will detail.
